1. Field of the Invention
This invention relates to providing the consumer with a "multi-directional" payment facility. More particularly, this invention relates to a financial process that a consumer can use either as a means of purchasing goods and services or as a means of accepting payment as a merchant selling goods and services. Currently, the two systems exist separately. Although the systems embodying payment methods are diversified and well developed, the systems embodying payment acceptance (merchants accepting payments) are often part of, but separate from, the various payment methods. These payment acceptance systems are equally well developed but not so widely available to the average consumer. Most particularly, this invention relates to merging the two functionalities thereby allowing for multi-directional payment processing available to the consumer.
2. Description of Related Art
The many financial processes available today to the end user consumer have single-directional payment methods. A vast majority of these processes are payment methods that provide convenient means of purchasing goods and services. For example, credit and charge cards allow purchases of goods and services on credit or deferred payment. New processes involving debit cards and smart cards make payment more convenient by not having to carry and use cash or checks. E-cash and other payment methods in cyberspace provide convenient means for movement of cash and purchases of goods and services electronically. These payment methods provide access and convenience to the consumer and enhance commerce. These financial processes are meant for consumers and commercial establishments to use as payment methods to purchase goods and services or as a means for moving money. Conversely, credit/charge cards are the cornerstone for businesses to accept payment for goods and services.
All of these processes have one thing in common. They are all single-directional, that is, all of these processes handle a flow of transactions emanating from the consumer's purchase and flowing to the merchant that produces and sells the goods and services. None of the existing processes today are capable of handling multiple directional flow of financial transactions where the direction is different from or opposite to the traditional transaction. For example, a consumer uses the credit card to make purchases but cannot use the same card to make a sale (i.e. accept payment). Today's cutting edge technology merely enhances current payment methods but is nevertheless single-directional. Smart cards, for example, are used to make payments but cannot be used to accept payments. There are no known financial processes today that provide for multi-directional transaction processing. There are no known financial processes that allow the average household consumer to engage in commercial transactions as a seller or merchant and accept credit/charge cards, debit cards, and smart cards while at the same time allowing the traditional purchasing transactions. A consumer may become a credit/charge card accepting merchant by applying for a merchant facility with one or more of the credit card institutions such as Visa, MasterCard, Discover, and American Express.
U.S. Pat. No. 5,569,897 discloses a system or method for producing more credit cards faster and safer. U.S. Pat. No. 5,585,787 allows one credit card to function like several credit or debit cards. Other prior art in the field of the instant invention serve the sole purpose of providing convenient and accessible consumption. U.S. Pat. No. 4,346,442 combines the features of a Visa credit card and investment and brokerage accounts for the purpose of utilizing free cash balances for payment of credit card purchases. U.S. Pat. No. 5,206,803 allows an account holder to charge as much as 40% of the balances of her/his 401(k). The result of this process is the use of funds designated for use upon retirement for present consumption. U.S. Pat. No. 5,083,270 is directed towards exploiting any asset with value by freeing its cash value for eventual release as loans without selling the asset. U.S. Pat. No. 5,083,270 does not disclose using the proceeds to finance commercial activities because such needs are served by various other financing schemes. What makes U.S. Pat. No. 5,083,270 unique is that it is directed towards the average consumer for the purpose of availing of the present and future value of an asset to finance day-to-day consumption. Assets such as real estate, works of art, and other valuable collections may potentially be completely depleted by releasing their value as loans to finance various consumer uses. U.S. Pat. No. 4,642,768 and U.S. Pat. No. 4,722,055 disclose releasing value of an asset but are centered on insurance policies. The net effect of a process following these patents is to consume present and future value of insurance policies which are originally set up to accumulate value and are methods of saving for the future. The patents cited show a diversified but linear approach to developing existing payment methods. They are all directed towards developing systems that handle a single-directional flow of transactions.
Single-directional payment methods cannot truly replace cash because they do not have the flexible properties of cash. Cash can travel in any direction, from consumer to consumer, merchant to consumer, consumer to merchant, merchant to merchant. Cash also stores value and retains its intrinsic value. Current payment methods perform but a fraction of what cash can do. In their present state, current payment methods flow from a consumer to a merchant and nothing more. Therefore it is impossible for current payment methods to displace cash entirely. The notion of a cashless society is not feasible with existing processes without altering the processes significantly to acquire more properties akin to cash. This new invention adds functionalities to existing payment methods by drawing from other existing methods that mimic some of the properties of cash. By merging functionalities, a new financial process is created that mimics cash. A second part of this invention further extends the functionality of the new process by allowing the proceeds to move either freely or systematically between the ordinary consumer accounts and the traditional brokerage accounts. A process that can perform all the properties of cash and offer more capabilities may truly eliminate the need for cash.
A financial process capable of handling multi-directional transaction has a significant economic impact. Single-directional processes such as those previously mentioned provide convenient means of purchasing goods and services and enhance economic growth through increased consumption. However such consumption has to be financed by some resource. Often such transactions are financed by revolving credit or debt or utilization of existing assets. This type of growth is not real growth in the sense that it increases the real wealth of the consumers. On the contrary, for some of the processes, they deplete real wealth. Real wealth of the average consumer can only be increased by increasing productivity and income. Today's processes benefit consumers by providing convenience but do not really help in improving overall economic well being. The effect of the current invention is to create and increase real wealth by empowering the average consumer with the means of accepting alternative means of payment and enabling the consumer in engaging in entrepreneurial commercial activities as a merchant or seller.
Equipment supporting current payment methods is very well developed. There is a wide variety of capabilities such as split dial capabilities that allow a terminal to dial into various merchant processors as instructed by the initiating credit card, charge card, debit card or smart card. Like credit cards and other existing payment methods, the equipment also performs the sole function of handling a singular transaction flow. Credit card processing terminals handle payment transactions from a purchaser to a buyer. More recent developments with cash dispensing machines expand the functionalities from dispensing cash to handing out information and other products (e.g. stamps). But no equipment exists today that can handle buy-sell and sell-buy transactions at the same time.
This invention touches on several fields. The core process or method is within the field of credit card processing systems. The closest prior art in this field is U.S. Pat. No. 5,740,427. Although the conceptual framework of this new invention has some resemblance to the debits and credits used in an accounting system embodied in U.S. Pat. No. 5,740,427, its application and functional parts are extremely different. U.S. Pat. No. 5,740,427 concerns the management of accounting transactions. In contrast, this new invention concerns processing of credit card transactions and involves several financial institutions to complete the process.
This invention also touches on the field of class 705: Data processing: Financial, Business practice, Management, or Cost/Price Determination. In this field, U.S. Pat. No. 5,727,249 discloses automating the generation of drafts as means of payment and has no significance to this new invention. Also touched by this invention is class 364#408-Electrical Computers and Data Processing Systems. In this field, U.S. Pat. No. 4,694,397 discloses a system that interfaces a regular banking system with a brokerage account. Also, U.S. Pat. No. 5,649,116 discloses an integrated decision management system. The instant invention also links banking transactions with a brokerage account, with the additional capability of specifically dealing with transactions that could not have been anticipated by U.S. Pat. No. 4,694,397 or U.S. Pat. No. 5,649,116 or any prior art concerning methods or systems linking or managing brokerage accounts. This is because the transactions generated by this invention are generated mostly by credit card transactions in which the credit card holder is the merchant receiving payment. This concept of a consumer using her/his credit cards to receive payments as a merchant is novel to this invention and could not have been anticipated by other prior art involving brokerage accounts.
Any new payment method must either be compatible with equipment already in place handling payment processing or requires new equipment to be developed. Developing new equipment to handle multi-directional transactions is not only very expensive but also makes the new method more difficult to be broadly accepted and therefore unattractive. Seamless transition from a single-directional environment to a multi-directional environment is necessary to make the proposition succeed. The solution to this problem is a gradual transition towards more sophisticated equipment. What is needed is a process that transcends the underlying equipment, and is appropriate for use now and with later equipment innovations.